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Aldermore launches 100% LTV mortgage

Aldermore has launched a family guarantee mortgage, available up to 100 per cent LTV.

The mortgage has a three-year fixed rate of 6.48 per cent and parents, step-parents or grandparents will be asked to provide a guarantee secured against their residential property for the amount of loan above 75 per cent LTV.

The family guarantee mortgage will initially be piloted via three distributors, Connells Group, Arun Estates and 3mc to potential homebuyers throughout England and Wales.

Loans are available on a repayment basis only and the maximum loan size is £250,000, and the minimum age of the borrower must be 25. There is also a non-refundable booking fee of £299 and a completion fee of £999.

Aldermore managing director of residential mortgagessays: “Many first-time buyers have become disenfranchised from the housing market because of the large deposit demanded by most lenders. We believe this is the single biggest issue facing first–time buyers and it needs to be addressed head on if the UK’s housing market is to have a chance of recovery.

“Buying and setting up a first home is an expensive process, which puts enough strain on a first time buyers’ finances without the additional pressure of needing to save a large deposit. Borrowers must be creditworthy and have sufficient income to comfortably afford their monthly mortgage repayments, with parents, step-parents or grandparents willing to provide a guarantee secured against their residential property.”

He says it has carefully considered the needs of the guarantor, resulting in a guarantee that is capped at the originally agreed amount.  

The guarantee can also be repaid at any time, or released if the loan to value on the mortgaged property falls to 75 per cent or lower.  

He adds: “Perhaps most importantly, we’ve limited the guarantee period to just 10 years at which point it will expire, giving guarantors clarity as to how long their commitment will last.”

David Livesey, group chief executive for Connells says: “Despite recent headlines about ‘generation rent’ and the UK taking a more European approach to home ownership, we believe there are many people who would prefer to buy their first home but feel disillusioned with the mortgage market and have lost hope of buying their own property. Indeed, our branches have registered 34 per cent fewer first-time buyers in 2011 compared to the peak in 2007.

“Aldermore’s new 100 per cent family guarantee mortgage will help those who don’t have a large deposit but can afford monthly mortgage payments to buy their first home.”


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